All Banking Law, All in One Place. Bloomberg Law: Banking is the comprehensive research solution that powers your practice with access to integrated banking-related legal news, analysis,...
By Chris Bruce
Dec. 10 — Morgan Stanley will pay $225 million to resolve claims involving mortgage-backed securities purchased by corporate credit unions, the National Credit Union Administration (NCUA) said Dec. 10 (Nat'l Credit Union Admn. Board v. Morgan Stanley & Co., D. Kan., No. 13-cv-02418, settlement announced, 12/10/15); (Nat'l Credit Union Admn. Board v. Morgan Stanley & Co., S.D.N.Y., No. 13-cv-06705, settlement announced, 12/10/15).
The accord resolves separate NCUA cases brought in 2013 in the U.S. District Court for the District of Kansas and the U.S. District Court for the Southern District of New York in connection with losses on the securities by four corporate credit unions — U.S. Central Federal Credit Union, Western Corporate Federal Credit Union, Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.
The settlement does not include an admission of fault by Morgan Stanley, the NCUA said in a statement. Morgan Stanley spokesman Wesley McDade Dec. 10 declined to comment on the NCUA's announcement
Corporate credit unions are wholesale credit unions that provide lending and various services to retail credit unions and their members, such as check clearing, electronic payments, and investments. Five corporate credit unions were seized by NCUA in the aftermath of the 2008 financial crisis.
The NCUA has since filed several lawsuits to recover losses on poorly performing mortgage-backed securities. The suits allege the sale of flawed securities contributed to the collapse of the corporate credit unions.
The NCUA said Dec. 10 that it has cases ongoing against the Royal Bank of Scotland, Goldman Sachs, UBS and Credit Suisse.
“NCUA continues to pursue recoveries on behalf of the corporate credit unions against the financial firms we maintain contributed to the corporates’ losses,” NCUA Board Chairman Debbie Matz said. “These actions fulfill our statutory obligation to act in order to minimize costs to the credit union system resulting from the crisis. They also promote accountability and ensure consumers remain protected.”
To contact the reporter on this story: Chris Bruce in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Ferullo at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)